Trump announces 15% tariff on Japan, down from 25%, Japan to invest S$700 billion in US

The United States (U.S.) and Japan have reached a trade deal, setting the tariff rate at 15 per cent, U.S. President Donald Trump said on Tuesday, Jul. 22 (local time).

Trump said on his Truth Social that Japan will invest, at his direction, US$550 billion (S$703 billion) into the U.S., which will receive 90 per cent of the profits.

"This Deal will create Hundreds of Thousands of Jobs — There has never been anything like it," Trump wrote.

Trump added that Japan will also open their country to more trade, including cars and trucks, rice, and other agricultural products, among other things.

The Japan Times noted that the U.S. President did not mention sector-specific tariffs that are already in place, including a 25 per cent levy on vehicles and auto parts, and 50 per cent on steel and aluminium.

"This is a very exciting time for the United States of America, and especially for the fact that we will continue to always have a great relationship with the Country of Japan," Trump said.

Japan Prime Minister Shigeru Ishiba told reporters on Wednesday, Jul. 23 (local time) that he will receive a briefing on the deal and will talk to Trump if necessary.

"I believe this will contribute to Japan and the United States working together to create jobs and promote high-quality manufacturing, thereby fulfilling various roles on the global stage moving forward," Ishiba said, as quoted by The Japan Times.

Reciprocal tariffs

The deal with Japan came ahead of Trump's Aug. 1 deadline for imposing reciprocal tariffs on various trading partners.

Trump had previously said that he would hit Japan with 25 per cent tariffs starting from Aug. 1.

The deal had also come just as Ishiba faced mounting calls from within his own party to resign after his coalition lost its upper house majority following Sunday's (Jul. 20) election.

According to The Guardian, Ishiba is tying his fate to the success of tariff negotiations.

Japanese outlet Mainichi reported that Ishiba is allegedly planning to announce his resignation before the end of July, but did not say precisely when.

Trump announced the deal with Japan after a reported meeting at the White House with Ryosei Akazawa, Japan's chief tariff negotiator, according to The Japan Times.

The U.S. President has faced pressure to conclude trade pacts ahead of his Aug. 1 tariff deadline.

Trump announced a 19 per cent tariff for goods from the Philippines on Tuesday (Jul. 22) after meeting with the Philippines President Ferdinand Marcos Jr at the White House. He said that U.S. goods will pay zero tariffs.

Trump also confirmed the same 19 per cent tariff on Indonesian goods, down from the initial 32 per cent, following a phone call with Indonesian President Prabowo Subianto.

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Top image via The White House/Facebook